1. In October 1, 2017, Metlock, Inc. assigns $2.0 million of its accounts receivable to...
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1. In October 1, 2017, Metlock, Inc. assigns $2.0 million of its accounts receivable to Alberta Provincial Bank as collateral for a $1.6-million loan evidenced by a note. The bank's charges are as follows: a finance charge of 4% of the assigned receivables and an interest charge of 12% on the loan. Prepare the October 1 journal entries for both Metlock and Alberta Provincial Bank.
2. Bramble Corp. sold $756,300 of accounts receivable to Marin Inc. on a with recourse basis under ASPE, as the risks and rewards have been transferred to Marin. The transaction meets the criteria for a sale, and no asset or liability components of the receivables are retained by Bramble. Marin assesses a finance charge of 4% of the amount of accounts receivable and retains an amount equal to 5% of accounts receivable. Prepare the journal entry for Bramble to record the sale, assuming the recourse obligation has a fair value of $9,470.
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